Are We Prepared to Deal with Another 2008 Financial Meltdown?

WASHINGTON—On Friday morning, the Senate began to discuss the nomination of Stephen Mnuchin to be the next Secretary of the Treasury. Listening to the discussion, conducted primarily by Democratic senators, because that's the way things have worked over the past week, it gradually dawned on anyone who was listening that Mnuchin's nomination may be the last chance to litigate the responsibility for the financial collapse that nearly destroyed everything in 2008. The big banks got a) bigger and b) pretty much away with it. The political salience of the events redounded mostly (and bizarrely)to the benefit of Republicans, because they pretended it was all about low-interest loans to Those People, and because a newly elected Democratic president had to spend as much time as he could to save what was left.

There is little question that Mnuchin is a creature of the piratical business model that nearly blew up the world. That much has become plain since he was nominated. Mnuchin bought a bank and converted it into a critter called OneWest, which was by any common use of the term a foreclosure mill. It paper-whipped thousands of people out of their money and their homes. (Which made it doubly ironic when, during his appearance before the Senate Banking Committee, Mnuchin explained that he'd forgotten to list a number of lucrative assets on his disclosure form because the paperwork was too complex.)

So, now that it's come down to the actual vote on his nomination—which will come on Monday evening as the Senate adjourned for the weekend at 2:30 on Friday—some of the senators decided to remind their colleagues and the country that what happened eight years ago was not an accident, or a freak of nature, but the inevitable result of interlocking corrupt business plans by which some people got rich and a lot of people got poor. Sherrod Brown, Democrat of Ohio, showed up with the goods.

"Here's what we do know. He made millions as a hedge fund manager. He made millions at Goldman Sachs , where he traded mortgage securities and other products that contributed to the financial crisis. He headed what's been called a foreclosure machine -- profiting from kicking hardworking Americans out of their homes. When presented with tough questions from members of the finance committee in front of which he appeared, Mr. Mnuchin expected leniency and understanding from a bunch of senators. But it's not something that he gave, leniency and understanding, for Ohio families trying to keep a roof over their heads. They got the runaround with lenders with claims of lost documents, modifications that weren't honored, and dual tracking."

Getty Images

Brown also used Mnuchin as a jumping-off point for discussing the remarkable—and darkly impressive—unanimity that we've seen all week as regards one of the wealthiest, most ill-qualified, and most ethically-challenged batch of Cabinet nominees in the history of the Republic.

"This Senate is only -- today is Friday, Saturday -- so three days away from party-line, party-line voting for this incredibly ethically challenged Secretary of the Treasury. Why? Listening to my Republican friends here, a number of them suggest they really don't much like this nominee. They didn't much like Secretary Price, a guy that did everything but sell stocks on the floor of the House, who bought and sold health care stocks while he was working on health care legislation for those companies. They didn't much like voting for him. A number of them wanted to vote against the Secretary of Education because she was maybe the least qualified Secretary of Education that's ever been nominated, but they voted for these people. Why? Because they're fearful. They're fearful of what Donald Trump will try to do to destroy their careers."

Brown was only getting warmed up. He had kicked ass. Now he named names.

"There are three members of the Republican conference who ran for president against Donald Trump. There's Senator Graham, Senator Rubio and Senator Cruz. All three of them were targets of Donald Trump, of candidate Donald Trump. He insulted them. He called them names. He turned his supporters on them, [and] the other 49 senators know it could happen to them. That's why you're seeing these party-line votes for people as ethically challenged as Steve Mnuchin… I would hope that just two or three or four Republicans could break from this party line train running through this body, stand up for the right thing, stand up against the ethical challenges of this nominee, and understand that the president may call them names, may tweet about them, may try to ruin their careers. Show some courage. Show some guts. Do the right thing. Vote no on Steven Mnuchin for Secretary of the Treasury."

For a long time, I thought the majorities in the Congress were running on parallel tracks with the White House. They had what they wanted—massively regressive tax cuts, reckless deregulation, destruction of the Affordable Care Act—and they figured that they'd get it from the president*, so they were willing to go along with whatever that day's lunacy was from the other end of Pennsylvania Avenue.

Maybe Brown is right. Maybe some of them are simply afraid of crossing the president* because of the latter's obvious instability. (After all, the judges who ruled against him on Thursday night are not going to be having a peaceful weekend.) More and more, if we are not descended from fearful men, as Edward R. Murrow observed in the heyday of Joe McCarthy, we are increasingly being ruled by them. There are many shadows in Washington these days, and more than enough people to jump at them.

A Part of Hearst Digital Media
Esquire participates in various affiliate marketing programs, which means we may get paid commissions on editorially chosen products purchased through our links to retailer sites.